Each affected service member may receive up to $125,000 in compensation
The Department of Justice has announced a $750,000 settlement agreement with the receiver of a foreclosure services company to resolve allegations that foreclosures carried out on service member homes violated the Servicemembers Civil Relief Act, according to the US Attorney’s Office for the Western District of Washington.
In a complaint filed in November, Northwest Trustee Services was alleged to have completed foreclosures on homes owned by service members without obtaining the court orders required by law.
Under the terms of the settlement, service members who had their homes illegally foreclosed on may receive compensation for the unlawful foreclosures of up to $125,000, with a total payout to service members of up to $750,000.
Northwest ceased operations in December and is now being liquidated in state court receivership proceedings. Before entering into receivership, Northwest described itself as a full-service trustee company providing foreclosure services to mortgage lenders in the Western region.
In May 2016, a complaint by a Marine Corps veteran sparked a DOJ investigation into Northwest’s practices. Northwest had foreclosed on the home of Jacob McGreevey of Vancouver, Wash., in August 2010, less than two months after he was released from active duty in Operation Iraqi Freedom.
McGreevey sued both his mortgage servicer PHH Mortgage and Northwest in 2016. However, the case was dismissed after a US District Court Judge accepted the companies’ argument that McGreevy had waited too long to file his case. The DOJ’s investigation revealed that, in addition to McGreevey, Northwest had unlawfully foreclosed on other homes of service members since 2010.
